Question
Fyre, Inc., has a target debtequity ratio of .85 . Its WACC is 9.9 percent, and the tax rate is 35 percent. If the companys
Fyre, Inc., has a target debtequity ratio of .85 . Its WACC is 9.9 percent, and the tax rate is 35 percent.
If the companys cost of equity is 14 percent, what is its pretax cost of debt?
If instead you know that the aftertax cost of debt is 6.8 percent, what is the cost of equity?
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Smith and Roberson Business Law
Authors: Richard A. Mann, Barry S. Roberts
15th Edition
1285141903, 1285141903, 9781285141909, 978-0538473637
